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The Relationship Between Corporate Governance and the Performance of Joint Stock Companies

Maassen, G.F. (2004). The Relationship Between Corporate Governance and the Performance of Joint Stock Companies. How the Macedonian Company Law Can Help. Macedonian Business Lawyers Review 9 (4): 115-130.

This paper introduces the reader to the importance of corporate governance standards and a well-drafted modern company law for the development of Macedonia’s private sector. Clearly, with the current attempts to modernize the 1996 company law, Macedonia has the great opportunity, and seen in light of EU-accession, an important obligation to modernize its company law.

With the company law adopted by Parliament in 2002, Macedonia made the first important step to further protect the rights of shareholders. Meanwhile, a third competing draft has been produced by Macedonian law experts who seek to incorporate a greater amount of flexibility for companies to choose their regulatory form.

Although the three versions of the law are different in many ways, they have in common the important role company law plays in the development of Macedonia’s private sector. Without a good company law, Macedonia will not be able to attract foreign investment, nor will it be able to build the confidence of domestic investors. A good company law is also important for the financial performance of Macedonian companies. The greater the protection of shareholders, the lower the cost will be for companies to attract financing and the greater the value their assets will be.

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Maassen, G.F. (2002). An International Comparison of Corporate Governance Models. A Study on the Formal Independence and Convergence of One-Tier and Two-Tier Corporate Boards of Directors in the United States of America, the United Kingdom and the Netherlands. Amsterdam: Spencer Stuart Executive Search.